Read More: Bubbles May Lurk Amid Fed-Fueled Corporate Behavior
Then There’s Bitcoin
This year’s quadrupling in the cryptocurrency has raised eyebrows across the financial sector, on several accounts.
“The biggest threat to bitcoin is a regulatory clampdown because it’s so obviously used for the funding of illegal transactions,” Legal & General’s Roe said. “It’s almost impossible to quantify the risk of whether or not major governments would regulate.”
A Chinese ruling this week to ban initial coin offerings, a popular means of fundraising for startups, briefly took the edge off the rally, clipping it 11 percent on Sept. 4. Mark Mobius, executive chairman at Templeton Emerging Markets Group, said in a recent interview that cryptocurrencies are getting “out of control and it’s going to attract the attention of governments around the world.”
What Bubbles?
Andrew Cole, a senior money manager with Pictet Asset Management Ltd., is in a different camp.
While bond yields in Europe “almost ensure that any investor is going to get poorer in real terms,” that doesn’t mean yields are set to rise, “because there’s increased regulatory framework that forces investors to buy them,” Cole said. As for equity valuations, he thinks economic growth is broad-based enough to justify them.
“I don’t see much evidence of mania or that a bubble has developed,” he said. “The average investor still remains risk-averse. The global financial crisis still hangs on people’s memories.”
This article was provided by Bloomberg News.